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Negotiators strike deal on 5 year, $305B highway bill

by Keith Lang | thehill.com | 12/1/15

House and Senate negotiators struck an agreement Tuesday on a $305 billion highway bill that would extend federal transportation funding for five years, setting up an eleventh-hour dash to win approval in both chambers.

The resulting 1,300-page bill, paid for with gas tax revenue and a package of $70 billion in offsets from other areas of the federal budget, comes just days before transportation spending is set to expire on Dec. 4.

The measure calls for spending approximately $205 billion on highways and $48 billion on transit projects over the next five years. It also reauthorizes the controversial Export-Import Bank’s expired charter until 2019. Lawmakers expressed confidence that the package will win approval in both chambers in time to beat the rapidly approaching Friday deadline.

Looking to claim an early legislative achievement, new Speaker Paul Ryan (R-Wis.) told reporters Tuesday that GOP leaders “expect to

have very good majority support” on the measure.

If enacted, the package would reflect the first transportation funding legislation to last longer than two years since 2005.

Transportation advocates praised Congress for moving to end a string of temporary road funding patches.

“This vital piece of legislation provides much-needed long-term certainty and flexibility for state and local governments and puts a renewed focus on the national transportation projects that allow Americans to move and our economy to thrive,” said America’s Infrastructure Alliance President Jeff Loveng.

“We have waited a long time for our congressional leaders to make transportation infrastructure a national priority and it appears that it has been worth the wait,” he continued.

Dubbed the Fixing America’s Surface Transportation Act, or the FAST Act, the bill formally reauthorizes the collection of the 18.4 cents per gallon gas tax that is typically used to pay for transportation projects, and also includes $70 billion in “pay-fors” to close a $16 billion deficit in annual transportation funding that has developed as U.S. cars have become more fuel-efficient.

The gas tax has been the traditional source for transportation funding since its inception in the 1930s, but lawmakers have resisted increasing the amount that drivers pay. The federal government typically spends about $50 billion per year on transportation projects; the gas tax only brings in $34 billion annually.

Congress has been struggling for years to come up with a way to pay for a long-term transportation funding extension without raising the gas tax. The offsets in the agreement that was announced on Tuesday include changes to custom fees and passport rules for applicants who have delinquent taxes.

Additional mechanisms include contracting out some tax collection services to private companies — over the objection of unions that represent federal IRS workers — and tapping dividends from the Federal Reserve Bank.

Conservative groups panned the reliance on transfers from other areas of the federal budget to finance the highway bill.

“This deal enables more deficit spending out of the Highway Trust Fund without any real reform,” Heritage Foundation transportation policy expert Michael Sargent said in a statement, pointing out that the deal increases the federal government’s annual spending on highway and transit programs.

“Lawmakers are fueling new spending by relying on budget gimmicks and unrelated tax increases,” Sargent continued.

“At the end of their negotiations, lawmakers failed to address the real problems in the trust fund, which are its chronic overspending and misallocation of resources,” he said. “Indeed, their plan will make both of these issues worse.”

Lawmakers who worked on the highway bill defended the compromise as an important step forward in an area of badly divided government.

“This legislation is a vital investment in our country. A safe, efficient surface transportation network is fundamentally necessary to our quality of life and our economy, and this conference report provides long-term certainty for states and local governments, and good reforms and improvements to the programs that sustain our roads, bridges, transit, and passenger rail system,” Sens. James Inhofe (R-Okla.) and Barbara Boxer (D-Calif.) and Reps. Bill Shuster (R-Pa.) and Peter DeFazio (D-Ore.) said in a joint statement.

“We knew that reaching an agreement on this measure would be challenging, but every member of the conference committee was certainly up to the task,” they said.

The Department of Transportation had warned that it would have to stop making payments to state and local governments for infrastructure projects if Congress did not agree on at least another temporary road funding extension.

The talks that resulted in Tuesday’s agreement began after the House passed a bill to spend up to $325 billion on transportation projects over the next six years. But that approach differed from a six-year bill approved by the Senate over the summer. House lawmakers had rejected that measure, which authorized funding for six years but only paid for three years of spending.

Lawmakers have passed a series of temporary extensions of federal highway funding in recent years, much to the chagrin of transportation advocates who complain that it is difficult for states to complete large construction projects on patchwork funding measures.